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Los Angeles college district settles for $1 million in civil rights case

March 1, 2013 | 5:31
pm

The Los Angeles Community College District has agreed to pay $1 million to a firm that alleged that it was unfairly passed over during the selection of an inspector general to oversee a $6-billion campus rebuilding program.

Fu-Gen, Inc. a Los Angeles private investigation company, sued the district in 2012 alleging that despite receiving the top score from the first review panel, it was not placed on the short list of candidates or even called in for an interview for the $3.5-million contract.

The Office of Inspector General was set up to monitor waste and fraud in the bond-financed project to modernize the district’s nine aging campuses.

In the complaint filed in U.S. District Court, Fu-Gen alleged that its rejection was racially motivated because its owners are African American.

The contract was subsequently awarded to the firm Policy Masters Inc., headed by Christine E. Marez. That choice, though, has been the subject of several probes over alleged irregularities.

A Times series published in 2011 uncovered cost overruns, poor planning and shoddy workmanship in the construction program.

In a 2011 audit, state Controller John Chiang said the district ignored its own internal rules and guidelines in selecting Marez and called for an independent investigation. Chiang’s report led the Board of Trustees to bring in City Controller Wendy Greuel to review the hiring.

Greuel found numerous flaws, concluding that Marez lacked essential experience and qualifications. The decision to disqualify Fu-Gen, Greuel said, was apparently on the basis that it was “too thinly staffed.”

The was at odds with district policy that the firm with the highest score was most advantageous.

“Fu-Gen was not given an opportunity to address the reviewers concerns, though two other finalist firms were allowed to enhance or change their team after their proposal were submitted,” Greuel said in her 2012 report.

The Los Angeles County district attorney’s office is also looking into aspects of the hiring.

Fu-Gen cited The Times series and Chiang’s report in filing its lawsuit. Subsequently, the two sides agreed to resolve the claims through mediation.

An attorney for Fu-Gen did not return calls seeking comment on the settlement. Representatives for the district also declined to comment, citing a confidentiality clause. As part of the settlement, Fu-Gen agreed not to bid on district contracts for a period of five years.

The college district said it has pursued a number of reforms, including centralizing management and setting tighter audit procedures.

In January, trustees voted to terminate Marez’s contract as of April 30, 2013, and seek bids for a new, restructured inspector general position.

Marez, meanwhile, said that as a candidate she was unaware of any flaws in the process that led to her selection.

She said she was unsure if she’ll bid on the newly designed inspector general post.

“The board has expressed that they are very happy with the work we’ve done, with the number of investigations and audits we’ve completed; there’s been no question about our performance,” she said.